The ACT Audit Office was established under the Audit Act 1989, following the introduction of self government for the ACT in 1989.

The Office began operations on 1 July 1990. Chief Minister at the time, Mr Trevor Kaine announced it as a "very significant milestone in the development of the ACT Government's administrative independence from the Commonwealth".

In appointing Mr James O'Neill as the first ACT Auditor-General, Chief Minister Kaine said that through exercising his legislative responsibilities the ACT Auditor-General would "play a significant role in ensuring that the highest levels of financial accountability are maintained for ACT Government programs and to enable the appropriate level of scrutiny by the ACT Legislative Assembly, by the Executive and by the ACT community".

The Audit Act 1989 was repealed in 1996 and replaced with the Financial Management Act 1996 and the Auditor-General Act 1996, which is the principal legislation that prescribes the operations of the Office today.